All Those Opposed
It's no secret that bankers strongly oppose the Obama administration's regulatory restructuring plan.
Still, the rough reception members of the American Bankers Association gave a top Treasury Department official at a conference last week likely drove the point home.
After a speech by Deputy Treasury Secretary Neal Wolin promoting the plan, the trade group opened the floor for questions. But they mostly just got statements followed by enthusiastic applause.
"It seems to me like we're reinventing another disaster," said Steve Wilson, the chairman and chief executive of LCNB National Bank in Lebanon, Ohio, who objected specifically to the creation of a new consumer protection agency.
Under the Obama plan, the banking regulators would be stripped of consumer protection oversight and such power given to the new agency.
Wolin defended the plan, arguing the status quo has not worked.
"We have a consumer protection system that has failed," he said. "There is no question about that, and we need now to move to a different approach, to which consumers are looked after by somebody and that is their primary mission."
But the audience was not won over. "There's not one person in here who doesn't believe we need to put the consumer front and center," said Barrie Christman, chairman of Principal Bank in Des Moines. "We just have concerns about many of the approaches that are in your proposal."
Bunning Is Fed Up
Some pairs may never see eye to eye: Felix Ungar and Oscar Madison, Batman and the Joker, banks and credit unions.
The same could possibly be said about Sen. Jim Bunning and whoever runs the Federal Reserve Board.
The Kentucky Republican's unrelenting criticism of the central bank was once again on display Wednesday when Fed chief Ben Bernanke gave his usual economic report — required by the Humphrey-Hawkins law — to the Senate Banking Committee.
Even when they agreed, the two were talking past each other.
Bunning pummeled Bernanke on questions from why the Fed did not allow more scrutiny of its workings to whether the central bank was overstepping its mandate. After citing a report by the bailout's inspector general that the government may end up spending nearly $24 trillion on the rescue, Bunning wouldn't let Bernanke defend himself. "That number makes all kinds of assumptions which are just simply not realistic," the central banker said.
Bunning responded: "They're not our numbers, sir. The IG is in charge of those numbers. Whether you want to fight the IG, that's your business. Don't fight with me about it."
Later, the senator asked Bernanke to give his definition of 'monetary policy,' and accused the Fed of stretching its meaning. The Fed chairman explained how Humphrey-Hawkins laid out key policymaking tenets of "full employment and price stability."
But Bunning cut him off, saying, "I know what the law is. I'm asking for your opinion."
Bernanke said: "I think that law is appropriate, and I follow the law."
It's a source of pride for the Independent Community Bankers of America that it's not that other trade group.
While the American Bankers Association represents institutions of all sizes, ICBA president Camden Fine has said his organization is "the voice for community banks in this nation."
But don't tell that to Sen. Richard Durbin, D-Ill., who blasted Fine's group for echoing its counterpart when it opposed mortgage bankruptcy reform in April.
"I think they have to take the word 'independent' out of independent community banks after that," Durbin, who authored the bankruptcy measure, said Thursday at a hearing on whether cramdowns should be revisited. "They're not independent anymore. They're part of the same operation."
Durbin said the ICBA, along with credit unions, blocked the measure even though it wouldn't apply to them. "They still joined with the [ABA] and said, 'We oppose it anyway.' "
In an interview, Fine confirmed there will be no name change.
"Rest assured that the Independent Community Bankers of America has no intention of dropping the word 'independent' from our association name," he said. "That's what we are. We're independent community bankers."